Estonia tightens reins on crypto industry

After initial love – Estonia tightens reins on crypto industry

After revoking the licences of many crypto companies, the country’s regulation is becoming increasingly strict.

The Ministry of Finance of Estonia wants to be stricter in granting licences to crypto companies in the future. The move comes after the ministry revoked the relevant licence of nearly two-thirds of all crypto companies last year.

According to ERR News, the „Eesti Vabariigi Rahandusministeerium“ submitted a draft law in January that tightens the reins on the crypto industry. Among other things, it proposes that the Estonian Financial Supervisory Authority be responsible for overseeing the Ethereum Code industry in the future, rather than the Special Financial Crime Unit (FIU).

This would put the crypto industry under the supervision of an actual financial authority, as the FIU is merely a department of the police authorities. Crypto-regulation is thus given a much higher status.

Crypto companies that nevertheless want to establish themselves in Estonia must pay a registration fee to the Financial Supervisory Authority. All 381 companies that still have a licence are also required to reapply for it.

Erki Peegel, a spokesman for the Ministry of Finance, emphasises in this context, however, that these steps do not necessarily symbolise a rejectionist attitude of the government towards cryptocurrencies. However, the ministry assumes that only 50 to 100 companies that still hold a licence meet the necessary requirements to be allowed to continue claiming it.

The planned changes to the law are partly driven by increased anti-money laundering efforts

For example, in June 2020, a massive money laundering scandal was uncovered that also involved many crypto companies. In addition, crypto fraudsters have repeatedly caused problems with the country’s „e-residency“ programme over the past year.

However, the corruption scandal and subsequent resignation of the previously incumbent Prime Minister Jüri Ratas has put the planned bill on hold for the time being. Parliament actually only had until today’s deadline to pass the law, which is why the further course is unclear for the time being.